HANOI–Bad debts in Vietnam’s banking system rose to an estimated 2.5 percent of outstanding loans this year, up from 2.03 percent in 2009, a state-run newspaper quoted the central bank governor as saying on Saturday. The ratio will be higher if the loan of less than 26 trillion dong banks extended to state shipbuilder Vinashin was included, Governor Nguyen Van Giau was quoted by the Vietnam Economic Times newspaper as saying. Vinashin has defaulted on a loan to a group of international lenders and informed them on Thursday it would make an interest payment only, sources with knowledge of the arrangement said. Giau was speaking at an extra-ordinary session of the National Assembly’s Economic Committee on Saturday, which questioned the country’s inflation and interest rates this year. The data on the health of the banking system were released after Standard & Poor’s Ratings Services cut Vietnam’s long-term sovereign credit ratings on Thursday, on concerns the banking sector has become more vulnerable to shocks.
Loans by Vietnam’s banking system this year grew an estimated 27.65 percent from 2009, above the central bank’s target of 25 percent, Giau was quoted as saying in an online report of the Vietnam Economic Times newspaper. Loans in the Vietnamese dong rose 25.34 percent from 2009 while the credit in foreign currencies, mostly in U.S. dollar, jumped 37.76 percent. Money supply was estimated to have risen 23 percent from last year, Giau said, compared with a central bank target of keeping the annual growth at 20 percent. The reports gave no values of loans or money supply. The newspaper quoted a central bank report as saying it will make sure banks observe the deposit rate ceiling of 14 percent to ensure the consumer price index rise below 3.5 percent in the first half of 2011.